Indian Equity Market Report & Outlook - February 5, 2025

 Market Overview: On February 4, the Indian equity indices closed on a strong note, with the Nifty closing above 23,700. The Sensex surged by 1,397.07 points, or 1.81%, to end at 78,583.81, while the Nifty gained 378.20 points, or 1.62%, to close at 23,739.25. The market witnessed a sharp bounce back, driven by a positive global sentiment and renewed buying in heavyweight stocks.

Sectoral Performance: Almost all major sectoral indices ended in positive territory. The Oil & Gas and PSU Banks indices outperformed, gaining over 2%. The banking and financial sectors played a crucial role in sustaining the rally. Meanwhile, broader indices also saw solid traction, with Mid and Smallcap indices rising by 1.56% and 1.09%, respectively.

Technical Analysis:

• The Nifty successfully cleared the critical resistance zone of 23,500/77,800 post a gap-up opening, leading to intensified bullish momentum.

• A bullish candle formed on the daily charts, coupled with an uptrend continuation pattern on the intraday charts, indicating further upward movement.

• Key support zones are at 23,600/78,100 and 23,500/77,800, while resistance levels are expected at 23,800/78,700–23,850/78,900.

• The Nifty is moving in a falling wedge pattern retest, indicating potential for a continued rally in the short term.

• RSI indicates a bullish crossover with strong momentum, suggesting further gains.

• The index is expected to move toward the 24,050 level, with key support at 23,500 and 23,250.

Market Sentiment and Trends:

• The market extended its recovery, climbing nearly 1.5%, driven by a rebound in global markets and positive domestic cues.

• The rally was broad-based, with all major sectors except FMCG ending in the green.

• Banking stocks rallied in anticipation of an RBI rate cut in the upcoming policy meeting.

• The index has decisively broken above the 200 DEMA (23,620), strengthening the bullish sentiment.

• The banking index must decisively move past the 50,200 level to sustain upward momentum.

Outlook & Strategy:

• The current market texture remains bullish, favoring a "buy on dips and sell on rallies" approach for traders.

• Selective stock picking with an emphasis on large-cap and large mid-cap stocks is recommended.

• If Nifty sustains above 23,620, it could target the 23,900–24,200 range in the short term.

• Traders should closely monitor global trends and domestic cues for further market direction.

Conclusion: The Indian stock market ended on a strong note, with bullish momentum likely to continue. With key support levels holding firm and technical indicators signaling further upside, the market could test new highs in the near term. However, traders should remain cautious around key resistance zones while maintaining a strategic approach toward stock selection.